SHRUTI AGARWAL (student) (108 Points)
11 March 2012A sold on 31-10-11 an agriculture land for rs.20,00,000. FMV as on 1-4-81 was rs. 200000. He acquires rural agricultural land for rs. 3,50,000 on 25-2-12 which was sold for rs.5,00,000 on 15-05-12. further he invested rs. 500000 in a residential house property on 25-5-12. He owned one residential house before this date.
Is he eligible to get exemption u/s 54F in AY 12-13? If yes, to wat extend? If no, then wat shud be the treatment?
Ankit 21 CA,CS,B.Com
(CA)
(3949 Points)
Replied 11 March 2012
Agriculture land is not a capital assets hence no taxable capital gain is arise here hence no question arise for deductibility............
SHRUTI AGARWAL
(student)
(108 Points)
Replied 11 March 2012
this is an urban agricultural land n therefore a capital asset.
Poonamchand Varma
( Student)
(204 Points)
Replied 11 March 2012
As per my thinking...
For claiming the exemption u/s 54F, Mr. A must invest the long term capital gain in purchase or construction of Residential House therefore, investment in Rural agricultural land is not eligible for exemption.
Further, Rural agricultural land is not a capital asset, hence no queastion of capital gain arise on its sales.
He invested in Residential house within 2 year after the date of sale of original capital assets, hence it will be eligible for exemption u/s 54F. The exemption will not be allowed if he owned more than one residential house. One house is allowed.
Thanks !
RaGHuRaM
(The Easy are never Good and the Good are never Easy....)
(4952 Points)
Replied 11 March 2012
Net Sale consideration = 20,00,000
Indexed Cost of
Acquisition = 15,70,000
LTCG = 4,30,000
(-)54B = 3,50,000
(-)54F
{500000*430000/2000000 = 80,000
= 107500(restricted to 80000)}
Taxable LTCG = NIL
binny
(student)
(42 Points)
Replied 12 March 2012
but here new rural agri land is sold within 3 years of purchase.
but under sec 54B if asset is sold within 3 years from the date of purchase than CG claimed as exemption shall be reduced from COST OF ASSET of new asset...
but capital asst does nt includ rural agri land..
TO IS CASE ME TAX TREATMENT KYA HOGI..???
binny
(student)
(42 Points)
Replied 12 March 2012
my question is can be claim exemption under sec54B if we purchase rural agri land on sale of urban agri land..?????
binny
(student)
(42 Points)
Replied 12 March 2012
my question is can be claim exemption under sec54B if we purchase rural agri land on sale of urban agri land..?????
SHRUTI AGARWAL
(student)
(108 Points)
Replied 12 March 2012
yeah we can claim the exemption u/s 54B bcoz it says pur of agri land, it cn be rural or urban...
Naresh Alse
(Chartered Accountant)
(27 Points)
Replied 12 March 2012
AY 2012 – 13 – For the period ending 31.03.2012
LTC G Computation
Particulars Amount Amount
Sale Consideration from Sale of Agri Land 2000000
Less : Indexed Cost of Acquisition FMV as on 1.4.81 200000
CII for 2012 785
CII for 1981 100 1570000
Long Term Capital Gains 430000
Less : Exemption U/s 54 B “New Asset” Acquired on 25.02.2012 350000
Balance LTCG 80000
Taxed @ 20% 16000
Naresh Alse
(Chartered Accountant)
(27 Points)
Replied 12 March 2012
binny
(student)
(42 Points)
Replied 14 March 2012
@ naresh: gain on sale of rural agri land is exempt...
nd wt abt exemption u/s 54f..???
Naresh Alse
(Chartered Accountant)
(27 Points)
Replied 15 March 2012
Excuse.. Since the New Asset is a rural agricultural land, sale of such land does not attract capital gains, and the entire income is tax free.
Regarding 54F, exemption under the section can be availed of when u invest LONG Term Capital Gains. In your case, in AY 2012 - 13, there is a balance of Rs 80,000 as LTCg if such amount is deposited in Capital Gains Account Deposit Scheme within the due date of filing return, and later utilised for purchase of House Property within a period of 2 years from the date on which the original transfer (initial sale) took place, then you will be eligible to claim exemption under this section. Kindly note that the section allows the claim of exemption, only if the assessee holds one residential house property OTHER than the New Residential Property being purchased on the date of Original Transfer.
I hope this clears your issue.
Warm Regards.
CAclubindia
